Questions 7 Through 10 Are Based on the Following Information

question 86

Multiple Choice

Questions 7 through 10 are based on the following information:
Tongas Company applies revaluation accounting to plant assets with a carrying value of $1,600,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of $1,500,000.
-The financial statements for year one will include the following information

• A) Accumulated depreciation $400,000.
• B) Depreciation expense $100,000.
• C) Plant assets $1,500,000.
• D) Revaluation surplus $100,000.

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Definitions:

Peacetime Deficit

A government budget deficit that occurs during periods without active warfare, indicating expenditures exceed revenues.

Federal Budget

An estimate of government revenue and expenditure for a specific fiscal year.

Discretionary Fiscal Policy

Government policy actions, such as changes in taxation or spending, intentionally made to influence economic activity.

Falling Output

A situation where the quantity of goods or services produced by an economy decreases over time.